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During the current year, Rothchild, Inc., purchased two assets that are described as follows:

Heavy Equipment

Purchase price, $275,000.

Expected to be used for 10 years, with a residual value at the end of that time of $50,000.

Expenditures required to recondition the equipment and prepare it for use, $75,000.

Patent

Purchase price, $75,000.

Expected to be used for five years, with no value at the end of that time.

Rothchild depreciates heavy equipment by the declining-balance method at 150 percent of the straight-line rate. It amortizes intangible assets by the straight-line method. At the end of two years, because of changes in Rothchild's core business, it sold the patent to a competitor for $30,000. A. Compute the amount of depreciation expense on the heavy equipment for each of the first three years of the asset's life. B. Compute the amount of amortization on the patent for each of the two years it was owned by Rothchild. C. Prepare the plant and intanglinble assets section of Rothchild's balance sheet at the end of the first and second years. Also, calculate the amount of the gain or loss on the patent that would be included in the second years income statement. Please select the proper format from below as an example of how it should be prepared and use that as a template of how it should look: a. (1) Straight-Line Schedule Depreciation Expense Accumulated Depreciation Book Year Computation Value 2015 $35,000 x 1/5 $7,000 $7,000 $ 33,000 2016 35,000 x 1/5 7,000 14,000 26,000 2017 35,000 x 1/5 7,000 21,000 19,000 2018 35,000 x 1/5 7,000 28,000 12,000 2019 35,000 x 1/5 7,000 35,000 5,000 (2) 200% Declining-Balance Schedule Depreciation Expense Accumulated Book Year Computation Depreciation Value 2015 $40,000 x 40% $16,000 $16,000 $ 24,000 2016 24,000 x 40% 9,600 25,600 14,400 2017 14,400 x 40% 5,760 31,360 8,640 2018 8,640 x 40% 3,456 34,816 5,184 2019 $5,184 $5,000 184 35,000 5,000 (3) 150% Declining-Balance Schedule Depreciation Expense Accumulated Book Year Computation Depreciation Value 2015 $40,000 x 30% $12,000 $12,000 $ 28,000 2016 28,000 x 30% 8,400 20,400 19,600 2017 19,600 x 30% 5,880 26,280 13,720 2018* ($13,720 $5,000) 2 yrs. 4,360 30,640 9,360 2019* ($13,720 $5,000) 2 yrs. 4,360 35,000 5,000 * Switch to straight-line

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